Exhibit 16-2 Lowball, Inc

question 23

Multiple Choice

Exhibit 16-2 Lowball, Inc., entered into a subscription contract with several subscribers that calls for the purchase of 2, 000 shares of $5 par common stock for $15 a share.The contract calls for a 20% down payment and specifies that any amounts not paid within the contract period will be forfeited in full.
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Refer to Exhibit 16-2.The initial entry to record this subscription and the down payment would include a

• A)credit to Common Stock Subscribed for $10, 000
• B)credit to Additional Paid-in Capital from Subscribed Stock for $10, 000
• C)debit to Subscriptions Receivable: Common Stock for $30, 000
• D)debit to Cash for $2, 000

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Definitions:

Cognitive Consistency Theory

A theory suggesting that individuals are motivated to maintain consistency among their beliefs, attitudes, and behaviors, leading to a change in one or more of those areas when inconsistency occurs.

Fritz Heider

A psychologist known for his work on attribution theory, which explores how individuals infer the causes of others' behavior.

Fat Intake

The amount of fat consumed in a diet, significant for nutritional balance and energy provision.

Dissonance Reducing Techniques

Dissonance reducing techniques are strategies individuals use to alleviate or minimize cognitive dissonance, the uncomfortable tension experienced from holding conflicting thoughts or beliefs.